NPCI Launches NPCI Tech Solutions to Build AI and Blockchain Infrastructure Behind India's Digital Payments

The National Payments Corporation of India (NPCI), the organisation behind the Unified Payments Interface (UPI), has set up a new wholly owned subsidiary focused on artificial intelligence, blockchain and the technology that underpins digital financial services.

The new company, NPCI Tech Solutions Ltd (NTSL), was announced on Wednesday, November 4. It will focus on developing AI-led solutions, blockchain applications and digital financial infrastructure. It will also provide global capability centre (GCC) services.

NPCI's chief technology officer, Vishal Kanvaty, has been appointed managing director and chief executive of the new entity. NPCI did not disclose the size of its investment in NTSL.

NPCI's fourth subsidiary

NTSL is NPCI's fourth subsidiary. The organisation already runs NPCI International Payments Ltd (NIPL), which takes UPI and RuPay to overseas markets; NPCI Bharat BillPay Ltd (NBBL), which operates the Bharat BillPay bill payments system; and NPCI BHIM Services Ltd (NBSL), which runs the BHIM payments app.

Each subsidiary allows NPCI to focus on a specific area with its own management team, governance and business model. The creation of a technology-focused subsidiary suggests NPCI wants to separate its work on emerging technologies from the day-to-day operation of India's core payment systems.

That separation could be important. UPI, which handles billions of transactions a month, is critical national infrastructure. Its reliability and security take priority over experimentation. A separate subsidiary gives NPCI room to develop and test new technologies without risking disruption to the systems that hundreds of millions of Indians rely on every day.

Why AI and blockchain

NPCI's managing director and chief executive, Dilip Asbe, framed the move as a response to rapid technological change. "Advancements in AI and other emerging technologies are creating new possibilities across digital infrastructure and financial services," he said.

AI has several potential applications in payments. It can improve fraud detection by spotting unusual transaction patterns in real time. It can help banks and payment apps handle customer queries, resolve disputes and manage risk. It can also support new services, such as conversational payments, where users initiate transactions through voice or chat interfaces.

Blockchain and distributed ledger technology offer other possibilities, including tokenised assets, programmable money and more efficient cross-border settlement. India's central bank, the Reserve Bank of India, has been piloting a digital rupee, and blockchain-based infrastructure could support a range of applications in that ecosystem.

The role of Global Capability Centres

NTSL's mandate to provide GCC services is notable. Global capability centres are offshore units that multinational companies set up, often in India, to handle technology, operations and research.

India has become the world's largest hub for GCCs, with thousands of centres employing more than a million people. By offering GCC-style services, NTSL could provide technology development and support for financial institutions, possibly including those in countries adopting UPI-style systems.

This fits with NPCI's international ambitions. Through NIPL, NPCI has been promoting UPI in other countries, and several have adopted or are working on systems based on India's model. A technology services arm could help support those deployments, offering expertise in building and operating real-time payment systems.

A leader from within

The appointment of Vishal Kanvaty as head of NTSL brings continuity. As NPCI's CTO, Kanvaty has been closely involved in the development and scaling of the organisation's systems, including UPI's growth to handling a substantial share of the world's real-time digital payments.

His experience in running large, highly reliable payment infrastructure will be relevant to NTSL. Technologies such as AI and blockchain must meet the standards of reliability and security that India's financial system requires.

India's digital public infrastructure model

NPCI is a central part of what India calls its digital public infrastructure. Together with Aadhaar, the national digital identity system, and other platforms, UPI has transformed how Indians make payments, from street vendors to large retailers.

The success of UPI has made India's approach a reference point for other countries seeking to modernise their payment systems. International organisations and governments have studied the model, and India has promoted it as a form of technology diplomacy.

Adding AI and blockchain capabilities could help NPCI keep its systems at the frontier of financial technology. As payment volumes grow and new use cases emerge, the underlying infrastructure will need to evolve.

Challenges and questions

Setting up NTSL raises several questions. NPCI is a not-for-profit organisation owned by banks and regulated by the RBI. How NTSL's commercial activities, including GCC services, will be structured and governed will be closely watched by industry participants.

There are also questions about how NTSL will interact with private fintech companies and technology providers. India's payments ecosystem includes a wide range of private players building on top of UPI and other NPCI systems. If NTSL develops its own AI or blockchain products, some may see it as a competitor rather than an infrastructure provider.

The absence of a disclosed investment figure means it is not yet clear how large NTSL's operations will be. Its scale will become clearer as it hires staff, announces projects and sets out its priorities.

Responsible use of AI in finance

Applying AI to financial infrastructure also brings risks. Systems that make automated decisions about fraud, credit or risk must be accurate, fair and explainable. Errors can block legitimate transactions or allow fraudulent ones, and biased models could unfairly disadvantage certain groups of users.

Regulators around the world are paying increasing attention to the use of AI in financial services. The RBI has issued guidance on the use of technology in banking and has stressed the importance of strong governance. NTSL will need to show that its AI systems meet high standards of reliability, transparency and accountability.

What it means for fintech

For India's fintech sector, NTSL's creation signals that the country's core payment infrastructure provider is investing in the next generation of financial technology. Startups and established companies building on UPI may find new opportunities to work with NTSL, or to build services on top of the infrastructure it develops.

For the global Indian diaspora working in financial technology and AI, the move highlights India's continuing ambition to lead in digital public infrastructure. Many of the engineers and product leaders who have built systems such as UPI have backgrounds in global technology companies, and NTSL may become a new destination for that talent.

Looking ahead

NTSL's early projects will show how NPCI intends to use AI and blockchain in practice. Possible areas include stronger fraud prevention for UPI, tools that help banks manage risk, infrastructure for the digital rupee, and services that support UPI-style systems in other countries.

The new subsidiary marks another step in NPCI's evolution from a domestic payments operator to a broader technology organisation with global ambitions. As India's digital economy continues to grow, the infrastructure NTSL builds could shape how hundreds of millions of people and businesses transact in the years ahead.